So much of what doesn’t work is the result of saying one thing and doing another.
Perhaps the biggest challenge with performance evaluation is that organizations’ espoused theories about it don’t line up with their theories in use. Most do come from a place of good faith and good intentions, speaking of empowerment, partnership, cooperation, teamwork, and development all in connection with performance appraisal.
The problem is that the practice of performance appraisal is very different. In many cases it runs counter to these contemporary values. Putting everyone through the same process, using the same forms, requiring signatures, putting the results in personnel files, giving responsibility for development to the boss; these features turn performance review into a patriarchal system of control.
What to do?
None of this is to say there aren’t aspects of the process that can be beneficial and do work. People need to know where they stand and deserve honest feedback to learn about themselves. So, let’s take what’s good about performance review and shift the process so that it matches the stated assumptions and values and gives both the individual and the organization what they need.
As I said in the post that started this series, there are typically five areas most performance appraisal systems try to address. We can begin by unbundling these. They are all very different with different purposes, and so should be handled in separate processes and interactions.
Performance feedback. Feedback is information, information that may spur learning. If it carries with it all the baggage associated with other topics like pay, status, and discipline, how much careful listening and learning is likely to occur? Not very much, as common practice shows.
Here’s a radical notion: the person most in control of a feedback conversation is the receiver of the feedback. After all, she is the one who ultimately decides whether it is useful or not. Therefore, give the responsibility for seeking feedback to her, since she’s the one who stands to benefit the most from it. This makes it voluntary, not mandated, and the feedback seeker is now empowered to get what she needs to succeed.
There is so much more to say about healthy feedback systems and conversations. Here’s a start. More in later posts.
Factors in the reward systems (compensation and promotion). The interplay between individuals, money, effort, and motivation is complex. Nevertheless, a common mistake is to place too much weight on external motivators like compensation. Study after study validates that people are motivated to give their best effort when they feel their work is meaningful and is connected to a higher purpose. That’s not to say that pay is not important, but its power is as a demotivating force when it is inequitable.
Many factors that drive results are not in the control of individuals. Plus, nearly everyone sees themselves as “exceeding expectations”. These are perhaps the most significant drawbacks in linking pay and performance. Pay people well enough to pull in and hold onto those who can best contribute to the organization’s success. Pay people fairly, with increases based on transparent policies about the market value of each job, and thereby take the immediate focus off money as a motivator.
Where promotions are concerned, a big part of the argument for using appraisals is that they are “objective.” This is an unreasonable assumption, as any performance review contains the judgments and opinions of the supervisor. Far better to design promotion processes that are fair, consistent, and that provide equal access to relevant information.
Review of the appraisee’s potential for professional development. Development goals, action plans, and organizational support for growth are all appropriate, if implemented at the discretion of the employee. Things start to go off the rails when the process is mandatory and all are subject to the same components. This difficulty is compounded when the supervisor is put in the position of career counselor; many supervisors are neither qualified nor interested in doing this. An employee who is subject to a compulsory development planning process is not empowered to be in charge of his own development, all assurances to the contrary notwithstanding.
Documentation for any centralized reporting that HR may do. With very few exceptions, performance appraisals are not required by law. In addition, appraisals are not reliably helpful evidence in court; they have been shown to work in favor of both employees and employers, depending on the circumsatnces. Sure, employers should consistently document performance deficiencies, for lots of good reasons, and there are countless ways to do it effectively without performance appraisals.
Raw material for any coaching the manager may do with the team member. Encouraging managers to be more like coaches is a worthy objective. However, not all are cut out to be coaches. In addition, as any good coach will tell you, everyone has different needs and responds to different kinds of encouragement. Consequently, a one size fits all approach as prescribed by the performance appraisal process is flawed from the outset.
So much of the way the appraisal process is designed and carried out results from the embedded assumption that improving individual performance will improve organizational performance. While leaders certainly want employees to give their best every day, this organization-as-machine metaphor where humans are interchangeable parts is well past its sell-by date. Organizational improvement is most often the result of improvement in larger systems and processes, not individuals. The job of managers and leaders is to create the conditions that enable people to unleash their talents and perform at their best. These things employees will freely give, if the conditions are right.
I am indebted to the work of Dick Grote, Peter Block, Tom Coens, and Mary Jenkins for this series on performance reviews.